2014 one of strongest years for UK IT outsourcing

The amount spent on outsourcing contracts this year in Europe is expected to be one of the highest figures ever

The amount of money spent on outsourcing contracts this year in Europe is expected to be one of the highest figures ever.

The overall value of European outsourcing contracts in the third quarter was €7bn, the third highest over the last ten years, according to research from Information Services Group (ISG).

The IT component of EMEA outsourcing recorded a 15% actual contract value increase for the first three quarters of 2014 compared with the same period in 2013, while the volume of ITO contracting in Europe hit an all-time high, with the number of deals up 16%.

The UK accounted for €2.8bn of the total. The next highest was the DACH (German speaking) region with a value of €1.5bn, followed by the Nordics and France, both worth €1.3bn.

In the UK, ACV was up 120% compared with the previous quarter and the number of contracts increased substantially by 48%.

“The European market presents a very encouraging picture so far in 2014, and the level of activity underway leaves us optimistic for the rest of the year,” John Keppel, partner and president at ISG, said. 

“2014 could end up being one of the strongest - if not the strongest - years in a decade.”

“The latest figures demonstrate that outsourcing is no longer a Northern European phenomenon, as more outsourcing activity spreads across the continent than ever before,” said the ISG report.

In July, when announcing its figures for the second quarter of 2014, ISG said a lot of transactions were expected to be completed in the second half of 2014. 

“Taking the year as a whole, we would expect contract value in the region to comfortably exceed 2013 levels,” ISG said at the time.

UK sectors not known for large-scale outsourcing are driving the increase. Recent research from NelsonHall and BPO firm Arvato found UK manufacturers spent £130m on outsourcing services in the first half of this year, with a big rise in functions being outsourced for the first time.

The research found 132% more was spent on outsourcing in the six months, compared with the first half of 2013. Two-thirds (66%) of all contracts in the manufacturing sector were first-time agreements.

 

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